APY Calculator — convert/compare interest yields.
APY Calculator
Convert nominal rates into effective annual yield and compare which account pays more.
Interest inputs
Yield comparison
What APY means
Annual Percentage Yield (APY) shows the real effective return on an account after compounding is taken into account. It makes it easier to compare savings products that quote different nominal rates and compounding frequencies.
Two offers may advertise the same nominal rate, but the one with more frequent compounding will often produce a slightly higher APY. This difference can matter over time, especially for longer holding periods or larger balances.
APY is especially useful when comparing high-yield savings accounts, CDs, money market products, and other deposit accounts. Actual yields can change over time, and account terms may differ by institution.
- Higher compounding frequency usually increases APY.
- APY is more useful than nominal rate for comparisons.
- Different products may quote different conventions and terms.
- Actual offers can vary by promotional or introductory periods.
Frequently asked questions
What is APY?
APY is the effective annual percentage yield after accounting for compounding over a year.
How is APY different from APR?
APR is a nominal annual rate, while APY reflects the effect of compounding and therefore represents the true annualized yield.
Why does compounding matter?
More frequent compounding adds interest sooner and can increase the effective yield even when the nominal rate is the same.
Is APY always higher than the nominal rate?
Yes, if compounding occurs more than once per year. APY is equal to the nominal rate only when compounding is annual.
Can this help compare accounts?
Yes. It is a useful way to compare savings products that quote different rates and compounding schedules.
Does this include taxes or fees?
No. APY is a nominal annualized yield before taxes, fees, or promotional conditions are considered.